The IPO market should end the first quarter with a bang as GoDaddy goes public during the shortened holiday week.
GoDaddy to go public
GoDaddy (GDDY) aims to raise $396 million at a market cap of $3 billion, or an enterprise value of about $4 billion. Acquired by KKR, Silver Lake and TCV for $2.25 billion in 2011, this domain name registrar behemoth manages about a fifth of the world's Internet domains. GoDaddy plans to continue a mix shift toward higher-margin website building services while managing its debt. 25 LBOs have IPO'd in the past twelve months, averaging a +2% first-day pop and +28% thereon.
A "tech-style" IPO: Kornit Digital
Kornit Digital (KRNT) is an Israel-based provider of digital equipment and inks used to print designs on t-shirts and other textiles. The profitable company is growing fast (30% CAGR since 2012) and expanding its margins through ink sales while the market for digital printers expands rapidly.
ViewRay (VRAY) had planned to go public last week but delayed the IPO. Backed by OrbiMed, Aisling Capital and Fidelity, it markets the only approved MRI-guided radiation therapy system, but in 2014 had negative gross margins and less than $10 million in sales. Early-stage medical device companies have had a challenging time in the IPO market this quarter, and Valeritas (VLRX) was the latest to postpone its offering last week.
Wowo (WOWO) has been drumming up interest for its $60 million "best efforts" IPO since February, and now appears ready to price. Last week, microcap Chinese consumer goods manufacturer Tantech Holdings (TANH) - also marketed as a best efforts offering - priced at the low end of the range and popped 100%, albeit on low trading volume.
| Renaissance Capital's IPO Calendar - Week of 3/30/2015 | ||||
| Issuer Business |
Symbol Exchange |
Deal Size $mil |
Price Range Shares Filed |
Top 2 bookrunners |
| GoDaddy Scottsdale, AZ |
GDDY NYSE |
$396 | $17 - $19 22,000,000 |
Morgan Stanley J.P. Morgan |
| Leading provider of web registration and hosting services with 59 million domains. | ||||
| Kornit Digital Rosh Ha'Ayin, Israel |
KRNT NASDAQ |
$99 | $13 - $15 7,100,000 |
Barclays Citi |
| Sells digital printing equipment and inks for the printed textile industry. | ||||
| Wowo Beijing, China |
WOWO NASDAQ |
$60 | $9 - $11 6,000,000 |
Axiom Capital |
| Operates an online mall connecting Chinese merchants and consumers. | ||||
| ViewRay Oakwood Village, OH |
VRAY NASDAQ |
$52 | $12 - $14 4,000,000 |
Cowen & Company Stifel |
| Markets the first and only FDA-approved MRI-guided radiation therapy system. | ||||
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IPO pipeline update
There were no additions to the IPO calendar last week; few companies launch before a shortened holiday week. Blueprint Medicines (BPMC) was the most notable new filer, given the biotech's $100 million proposed deal size and its lead bookrunner Goldman Sachs, as the underwriter has led just two biotech IPOs since 2013: FibroGen (FGEN; +66%) and Atara Biotherapeutics (ATRA; +233%). Last week also saw updated filings from LBO'd retailer Party City (PRTY), custom chip designer eASIC (EASI) and high frequency trading firm Virtu Financial (VIRT).
IPO market snapshot
The Renaissance IPO Index, a market cap weighted basket of newly public companies that is designed to represent the US IPO market, has traded up over 6% year-to-date, compared to 0% for the S&P 500. This suggests that the IPO market remains open to new issuance heading into the 2Q 2015. Renaissance Capital's IPO ETF (NYSE: IPO) tracks the index, and top ETF holdings include Twitter (TWTR), Alibaba (BABA), Hilton (HLT), Ally Financial (ALLY) and Voya Financial (VOYA). To find out if this is the best ETF for you, visit our IPO investing page.
